Alan Mulally Retirement Plans - Good or Bad for Ford?

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How can you give a CEO an " A" when in AUGUST 3, 2006 -- Ford Motor Co. has cumulatively recalled 6.7 million vehicles since January 2005 that are equipped with a Texas Instruments speed control deactivation switch that has been linked to dozens of engine fires.

Allan Mullaly was not employed by Ford at that time.

If you want to blame Ford I have no problem with that. I have certainly had my issues with them though not at all to the degree you did, but Mulally is part of the solution.

Courts, meanwhile, are odd things. There is no logic to them and huge injustices are overlooked while at other times frivolous suits are rewarded.

2014 sounds like a long way off, but if Mulally decides to leave on 1/1/14, then we're really jut looking at 13 months before the handoff.

Call it two years if he steps down at the end of 2014.

Sucession plans have been laid and Mulally is currently 67 (the new 57). Better to set something up now, like Apple did, and trust that the scheme and pending retirement won't be a drag on the stock value.

The Detroit News has "fixed" their article to conform with Ford's press release, which says that Mulally will stay on as president and CEO "through at least 2014".

Mark Fields becomes COO and the obvious successor. The WSJ reports that "Ford officials stopped short of specifically naming Fields the next CEO, but both Mulally and Ford said they're rather see an internal candidate take over the top job than to hire someone from outside the company.

That was not the opinion in 2007 when Ford hired Mulally away from Boeing, a decision that at the time, many said was a risk because he was not an automotive expert."

The Fields choice is kind of interesting and there may be some differences of opinion because while he has been a key player under the Mulallay turnaround, he was also a key player during the disastrous previous management leadership. Also, as North American chief, he is sitting at the top while the quality is bombing. Probably just depends on whether he keeps himself in with the Ford family.

I think there was some of that "irrational exuberance" initially when Ford avoided BK. Truth is, I think they would have been better off restructuring because they had to leverage the hell out of themselves to avoid BK, keep too much fixed cost and then get shafted by hardline UAW as a return for it. But it did keep the Ford family firmly in control with a minority financial holding through their special class of stock shares. Don't want to be totally negative though, because a lot of the Mulally changes are going to help them out for a long time as long as the Ford family can keep personalities, internal politics and the like out of it after he retires. They can't afford to go back to the old management and leadership model they had before Mulally's leadership.

Without knowing all the ins and outs of what goes on at Ford behind closed doors, it seems to me, as a rank outsider, that Ford made a strategic error in trying to go into the software business. They really should have hired Silicon Valley to develop all their driver/car interfaces. Their systems haven't worked out too well.